Warren Buffett? Michael Wolff? Amarillo Slim? Poker Proverb? Whispering Saul?
Dear Quote Investigator: There is a quotation I have seen in several books and periodicals aimed at investors. Here is one version:
If you have been in a poker game for a while, and you still don’t know who the patsy is, you’re the patsy.
These words are sometimes labeled an “old saying” and sometimes attributed to the legendary super-investor Warren Buffett. What do you think?
Quote Investigator: Warren Buffett did use a version of this quotation in a letter he sent to the shareholders of his conglomerate Berkshire Hathaway Inc. The letter was dated February 29, 1988, and it summarized business activity in 1987. Buffett discussed a metaphorical figure called “Mr. Market” and indicated that a skilled investor should have knowledge that is superior to that of “Mr. Market” [BHWB]:
Indeed, if you aren’t certain that you understand and can value your business far better than Mr. Market, you don’t belong in the game. As they say in poker, “If you’ve been in the game 30 minutes and you don’t know who the patsy is, you’re the patsy.”
However, Buffett did not claim that he originated the saying; instead, he suggested it was an aphorism used by poker players. QI has located four instances of the saying in 1979 and these appear to be the earliest currently known though earlier examples are likely to exist.
In 1979 the book “The Aggressive Conservative Investor” used a statement of the advice as an epigraph for chapter ten where it was identified as a “Poker Proverb” [ACPP]:
If after ten minutes at the poker table you do not know who the patsy is—you are the patsy.
In June of 1979 in the Atlantic Monthly a story about investing titled “Smart People, Smart Money” included a version of the saying in the summary paragraph that prefaced the article. The words were credited to an individual with the alias “Whispering Saul” [AMWS]:
A stockbroker introduces his financial advisers, such sages as Billy the Shooter and Father Abraham and the wise Whispering Saul, who reminds us, “If you sit in on a poker game and don’t see a sucker, get up. You’re the sucker.”
Here are some additional selected citations in chronological order.
In July of 1979 an editorial in the periodical “Financial World” discussed government spending and used the poker analogy to label taxpayers suckers [FWPS]:
Well, isn’t it about time that somebody speaks up for the guy who ends up footing the bill? And, if after all this time, you are having trouble figuring out who that is, take a fast look around at your subway, your bus line, your electric utility, your railroad, ad infinitum. Like the man said, if you enter a poker game and you don’t see a sucker, get up and leave – you’re it.
In August of 1979 the adage was further distributed via the pages of the Christian Science Monitor in an article titled “How to Invest $1,000″. The author referred to the Atlantic Monthly story and repeated two of its quotations [CMWS]:
Whispering Saul, the pseudonym for a financial wizard quoted in a recent Atlantic Monthly article, put it more colorfully. Most of his advice is designed for big investors: “When you borrow five thousand from a bank and you can’t pay back, you’ve got a problem. When you borrow five million from a bank and you can’t pay back, they’ve got a problem.”
But he also tossed off an occasional pointer for small investors: “If you sit in on a poker game, and you don’t see a sucker at the table,” said Saul, “get up. You’re the sucker.”
Top researcher Barry Popik has investigated a similar saying: “Whenever you don’t know who the loser is in a transaction, then the loser is you.” His results are available via this link, and they include complementary citations with some that credit the famous poker player Amarillo Slim.
In February of 1988 Warren Buffett used a version of the expression in the letter he sent to shareholders. The details were given earlier in this post. On April 5, 1988 a long excerpt from the letter was reproduced in the New York Times. The excerpt included the poker adage as part of the concluding paragraph [NWB1]. On April 10, 1988 the New York Times disseminated the saying again. This time Buffett’s words appeared as a freestanding quotation, but his name was misspelled as “Buffet”. Oddly, the quote was slightly altered by the deletion of the second occurrence of the word “you” [NWB2]:
“As they say in poker, ‘If you’ve been in the game 30 minutes and don’t know who the patsy is, you’re the patsy.’”
Warren E. Buffet, chairman of Berkshire Hathaway, in the company’s annual report.
In 1999 the author and internet pioneer Michael Wolff used a variant of the saying that applied to business deals instead of poker. In the following excerpt Rubin refers to Jon Rubin an investor in an internet media company [BRYF]:
Rubin, while being played for a fool, I suspected, by the bankers (“If you don’t know who the fool is in a deal, it’s you,” they cautioned merrily), was working hard to get his head around this new era of communication and technology.
In 2004 Michael Wolff again used a version of the adage tailored to the realm of business [AMYF]:
If you don’t know who the fool is in a room full of bankers and deal makers and media bigs, it’s you.
In 2005 Amarillo Slim published a revised version of his 1973 work “Play Poker to Win”. This new edition included the saying, but Slim did not credit himself with the aphorism; instead, he cited Warren Buffett and a group of anonymous others [ASPF]:
If you want to make money playing poker, selecting the right game is the most important factor. As Warren Buffett and a million other fellows have said, “If you can’t find the sucker at the table, you’re it.”
Slim also, included the phrase in a list of the “Top Ten Keys To Poker Success”. Here are the first two [ASPF]:
(1) Play the players more than you play the cards.
(2) Choose the right opponents. If you don’t see a sucker at the table, you’re it.
Slim noted that he was inspired to create such a list by watching the talk-show host David Letterman. A regular segment featuring a top-ten list was initiated in the 1980s during Letterman’s NBC show Late Night. This was after the 1979 instances of the adage.
In conclusion, Warren Buffett did help to popularize the aphorism about poker, but he did not create it. By 1979 or earlier the expression was being used by investors. Nowadays variants that do not mention poker are in circulation. Thanks for your question.
(Many thanks to Ed for suggesting this topic and motivating this exploration.)
[BHWB] 1988 February 29, Letter to the Shareholders of Berkshire Hathaway Inc. from Chairman of the Board Warren E. Buffett, Topic: Summarizing 1987. (Accessed at berkshirehathaway.com on 2011 June 3) link
[ACPP] 1979, The Aggressive Conservative Investor by Martin J. Whitman and Martin Shubik, [Freestanding quote at beginning of Chapter 10], Page 154, Random House, New York. (Verified on paper)
[AMWS] 1979 June, The Atlantic Monthly, Smart People, Smart Money by John D. Spooner, Page 33 and 37, The Atlantic Monthly Company, New York. (Verified on paper)
[FWPS] 1979 July 15, Financial World, Editorial: Chrysler and the Kremlin, Page 11, Column 1, Financial World Partners, New York. (Verified on microfilm)
[CMWS] 1979 August 21, Christian Science Monitor, How to Invest $1,000 by Christopher Swan, Start Page B1, Quote Page B19, Boston, Massachusetts. (ProQuest)
[NWB1] 1988 April 5, New York Times, Taking Advantage of ‘Mr. Market’, Page D1, New York. (ProQuest)
[NWB2] 1988 April 10, New York Times, In Quotes, Page 14 (NYT Page 131), New York. (ProQuest)
[BRYF] 1999, Burn Rate: How I Survived the Goldrush Years on the Internet by Michael Wolff, Page 51, Touchstone: Simon & Schuster, New York. (Verified with Amazon Look Inside)
[AMYF] 2004, Autumn of the Moguls by Michael Wolff, Page 66, HarperCollins, New York. (Google Books preview)
[ASPF] 2005, Amarillo Slim’s Play Poker to Win: Million Dollar Strategies from the Legendary World Series of Poker Winner by Amarillo Slim, [Revised version of 1973 edition], Page xvi and 10, HarperCollins, New York. [Warren Buffett's use of the adage is mentioned in the Introduction on page xvi; The Top-Ten List is on page 10.] (Google Books preview) link link